Tharisa targets US$260m for operations

THARISA Plc — parent company for Karo Mining Holdings (KMH), is planning a US$260 million capital raise for its local operations — the Karo Platinum Project.

According to the group, negotiations are already in progress to raise the US$260 million debt capital.

“Negotiations are well advanced by Karo Platinum on a senior project finance facility and a term sheet has been agreed with a consortium of lenders, supported by political and commercial risk insurance, for an amount of US$160 million,” said the group in an update for the year to September 30, 2023.

“Negotiations for the balance of the funding are on-going and the alternatives include commodity pre-payments, by-product and base metal streaming transactions, working capital facilities and possible strategic investors,” said KMH.

According to the group, advisors have already been appointed to advise Karo Platinum on these alternatives.

“The prospects of success are considered high based on the long asset life of the project and core commodity fundamentals.”

During the past year, the resources group raised US$36,8 million (excluding transaction costs) through a US dollar denominated structured debt instrument that was successfully listed on the VFEX.

“The funds raised were utilised in part-funding the development of Phase 1 of the Karo Platinum Project,” said financial director Andrew Henwood.

As part of the equity and quasi equity to be raised by the company as part of the funding of the Karo Platinum Project, Tharisa committed to provide US$135 million of funding to the Karo Platinum Project, of this amount US$65 million has been received. The balance of US$70 million is available for draw-down

“In addition, the parent company supported the Karo Project with further equity injection of US$65 million during the period, which continues to be utilised to support the project’s working capital requirements.

“The project is being developed on the Great Dyke in Mhondoro-Ngezi, Mashonaland West Province,” said Henwood.

According to the group, Karo commenced with bulk earthworks and construction of civils in December 2022 with the first concrete poured in June 2023. In the same month, open pit pilot mining commenced with the objective of optimising the mining methods and producing ore to further test and refine metallurgical processing.

At nameplate capacity, Karo will process approximately 2,5 Mtpa of ore and produce 190kozpa of platinum group metals (PGMs) (6E basis).

Henwood added the PGMs’ price environment has necessitated a review of the commissioning timeline.

Resultantly, its first ore in mill (FOIM) is now planned for June 2025 whilst the project work streams have been divided into smaller commitments to ensure continued development aligned with funding availability.

“Manufacturing of key long-lead items is nearing completion as of the statement of financial position date,” he said.